In line with the wishes of the European Union and the International Organization of Securities Commissions, the Guernsey Financial Services Commission has released proposals for the pricing of Undertakings for Collective Investment in Transferable Securities.

The so-called 'guidance note' sets out the pricing controls and checks that managers and trustees should, if it is passed in its current form, apply together with the standards of conduct the GFSC expects when incorrect pricing issues relating  to Collective Investment Schemes takes place and when the GFSC thinks that compensation is in order. The law under which this is happening is the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended.

Rule 5.3.1 states that wherever the dealing price of any share/unit is found to be incorrect by 0.5% or more of the price of a share/unit, compensation to share/unit holders ought to be required unless, exceptionally, the trustee considers that such compensation is inappropriate. If so, he must report the matter to the GFSC together with his recommendation and justification. In all cases where compensation is otherwise required, amounts due to reimburse share/unit holders for individual sums under £30 (or currency equivalent at the rate taken at the valuation point) will not normally have to be paid.